East Hampton Town’s bond rating has again been upgraded by Moody’s Investors Service, which assesses the town’s financial position and outlook before issuing a rating prior to a town bond sale.
The rating went up one level from Aa3, assigned last year, to Aa2. The ratings range from a low of C to a top rating of Aaa. Numeric modifiers of 1, 2, or 3 are added to all but the top designation, with 1 indicating a top rating within the alphabetical category. The Aa2 rating is two steps from the top rating of Aaa.
East Hampton’s rating was dropped to A2 after the extent of financial mismanagement under the McGintee administration came to light.
According to Moody’s, “the Aa2 rating reflects the town’s stable financial position, which has improved over the past several years as a result of deficit financing, improved budgeting and strengthened financial management practices. The rating also incorporates a moderate debt burden and sizeable tax base characterized by strong wealth and income levels.”
Moody’s also cited “strong management with demonstrated ability to restore financial flexibility.”
Len Bernard, the town budget officer, said in an official statement that Moody’s had “recognized the many improvements and advancements in financial operations made during the Wilkinson Administration and the resulting positive performance, and felt very comfortable with the direction and leadership of current Supervisor [Larry] Cantwell with his 30-plus years of proven experience in municipal finance and budgeting.”
Mr. Cantwell said in the release that he was “pleased Moody’s has recognized the Town’s improved financial condition as well as our preliminary results in the current year and expressed confidence in our outlook going forward.”
“The improved rating should generate more market interest in the bonds and bond anticipation notes being sold later this month by the town and should result in lower interest costs,” according to the release.
Mr. Bernard predicted that the town could save up to $100,000 in interest over the life of the bonds.
Moody’s also assigned a “stable outlook” to the town, saying that “the town is expected to maintain a solid financial position due to its conservative budgeting and strong financial management practices with limited future borrowing planned.”